New financial regulation bill gets signed last week. According to WSJ, "the new law regards bond-ratings firms as 'experts' and holds them liable for the quality of their ratings."
Moody's et al say this creates too much risk for them so they immediately refusing to allow their credit ratings to be used on new bond issues. Slight problem: SEC regulations require these ratings by law.
For now the SEC has granted a six month waiver allowing bond documents to be issued without ratings. Which is stranger -- the contradictory dictates of the new financial regulations or the unwillingness of the raters to vouch for the quality of their ratings?
How many more stories like this will we be seeing in the coming months?
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